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Fiber Network Grows As A Necessity As Demand For Video Strengthens In APAC

The following post comes from Kagan, a media research group within S&P Global Market Intelligence. To learn more about this research, please request a call.

Executives at this year's Broadband Forum Asia, held April 11-12 in Hong Kong, agreed that reliable and high-speed broadband connection will become a necessity in the region as a result of growing demand for video streaming, online applications, and the Internet of Things (IoT).
Trends in broadband usage contribute to the evolution of broadband technology. Video streaming, now becoming a central part of Internet consumption worldwide, is a major bandwidth killer. Internet service providers compete fiercely to satisfy customers' demand for improved streaming experience.

In cooperation with Hong Kong Broadband Network Ltd., S K Cheong, Executive Director and General Manager at TVB, claimed the video rebuffering rate on TVB's over-the-top service has been reduced to 0.1% of a minute — a hardly noticeable duration, as demonstrated at the conference. Subscribers do not need to pay an extra fee to access TVB's OTT service myTV Super on HKBN. In return, HKBN gained 103,000 new subscribers as of March 2017 - these subscribers signed up as a result of myTV Super's launch in April 2016.

ISPs adopt different business models in response to market demand. HKBN and Telekom Malaysia (TM) offer unlimited data services with simple pricing tiers. Hong Kong Telecommunications, on the other hand, packages on a service by service (app by app) basis, offering data for use on the subscribed services/apps.

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Bandwidth is critical when it comes to UHD streaming and IoT. Tony Emerson, Managing Director of Worldwide Media & Cable at Microsoft Corp., highlighted the importance of bandwidth to ensure the company's new API products run smoothly. Michael Zahm, Head of Corporate Development at NTT Innovation Institute, forecast that one-third of IoT products will be related to healthcare, while HKT also has a plan to develop e-healthcare in relation to smart living.

Developing markets in the region are catching up on fiber deployment. Farid Sani, Chief Strategy Officer at TM, commented that broadband connection will become a necessity in five years and that broadband speeds at gigabit-per-second levels will then be mainstream in residential households. Fiberstar of Indonesia and Fiber@home of Bangladesh have started fiber deployment in densely populated areas in their respective markets, with both companies agreeing that residential business is more lucrative than commercial because of the demand for video streaming and the use of apps.

Meanwhile, Alphabet Inc.'s Google India is gaining success with its free Wi-Fi service Google Railtel. It is offered in 110 railway stations and is planned to reach 400 stations by 2018, with the aim of providing Internet connectivity for Indians from lower income classes. According to Gulzar Azad, Country Head of Connectivity at Google India, each day an average 15,000 new users connect to Google Railtel.

Kagan, a media research group within S&P Global Market Intelligence, forecasts broadband penetration rate in the Asia-Pacific region will reach 50.2% by 2023. Ranked by subscribers, Asia is the world's biggest broadband region, while China, Japan, South Korea, and India are among the world's top 10 broadband markets. In terms of broadband household penetration, Singapore, South Korea, and New Zealand rank among the world's top five markets. In 2016, fiber had Asia-Pacific's biggest market share at 72.5%.

Learn more about Kagan's research on global fixed-broadband markets here.

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